Forget e-wallets. Ayannah taps agents to serve the unbanked and it’s growing fast

The Philippines has seen over US$33 billion in remittances from Filipinos working overseas last year, and an even bigger domestic flow of over US$40 billion as people in the provinces move to metro areas to find work.

A huge chunk of those cash transfers has gone to families who struggle to manage their financial lives because they lack access to the traditional banking system.

Seventy-seven percent of the country’s population are unbanked. That’s the market that Ayannah has been serving with its stack of digital financial services.

Backed by venture capital firms like 500 Startups and Wavemaker Partners, the startup created a software-as-as-service platform hosting payment agents across the Philippines that can cash out remittances for families.

“The cost of sending money to the countryside used to be as high as 7% of the principal amount. But with more cash-out centers, the rates have gone down to 3% today,” Ayannah founder Mikko Perez tells Tech in Asia.

Connecting agents has made cash-outs easier, too. Banks and traditional money transfer outlets are few and far between in rural areas, so recipients often have to travel hours to redeem their money.

What Ayannah does is convert brick-and-mortar businesses like courier branches, pawnshops, pharmacies, and gas stations into cash-out agents, placing them along with established remittance players in one “interoperable” network. What this means is that money can be sent and received through any of the agents in the network. An app version also allows any mom-and-pop shop or individual with a smartphone to become an agent.

A village store offers financial services for Ayannah partner Panalo Express / Photo credit: Ayannah

Ayannah’s platform doesn’t stop with remittances. There are other services like mobile top-ups, bill payments, and e-wallet cash-ins.

The idea is to make agents so ubiquitous that consumers can perform transactions from wherever they are.

Gaining serious traction

When Tech in Asia last caught up with Ayannah five years ago, it was still laying the groundwork for the business, seeing a few transactions here and there.

Today, with close to 10,000 agents serving 12 million consumers, transactions have gone up to more than 50,000 per day, Perez says. That gives Ayannah – which takes a percentage fee, the same as its agents – a steady revenue stream.

The company grew its revenue 12-fold between 2016 and 2019, and expects to become profitable by 2021 as new services give it a boost.

Cash is still king

Preparing for the future

Making an impact